May 30 2014
New sources of revenue for sanitary sewers are sought despite years of diverting funds away from the Sewer Fund for other City purposes.
At a recent Council meeting, the Budget Advisory and Financial Planning Committee (BAFPC) made recommendations to seek new sources of revenue to pay for remaining renovations to the City’s aged sanitary sewer pipes. The recommendations included:
1. A Sewer Tax surcharge of 20 – 25% for two to three years.
2. A temporary Real Estate Property Transfer Tax surcharge of $2 -$3 per $1000 of sale price
3. A $1.2 to$1.4 million loan from the General Fund to the Sewer Fund
Piedmont property owners have for decades been paying into the Piedmont Sewer Fund via their property tax bills and provided ample funds to cover EPA required renovations and maintenance of the sanitary sewer pipes. However, starting many years ago, much of the Sewer Fund money was diverted to pay for various General Fund activities, such as maintaining the storm water system and street sweeping. The sanitary sewer system is separate from the storm water system. Since the Sewer Fund was used as a revenue source for the storm water system and undefined public works activities, the General Fund was relieved of paying for these and other standard City services.
The assignment of storm water expenses to the Sewer Fund has had little recognition by those assessing the need for “new taxes” such as increased property taxes, property transfer taxes, or debt instruments including loans. The draw down of funds from the Sewer Fund transferred to the General Fund has been largely unknown to property owners, who now might be asked by the City for more taxes through an upcoming ballot measure.
Piedmonters, in general, have appeared eager to comply with EPA decrees and requirements. The transfer of Sewer Fund money to the General Fund has raised questions.
When looking at Public Works Department employee positions, significant costs are attributed to the Sewer Fund without backup information to support hours worked or projects completed by certain public works positions.
The City’s reserves have recently grown providing funds to support projected emergencies and general maintenance, while the Sewer Fund continues to have its funds transferred to support the General Fund activities.
Some have stated that transferring money to the General Fund from the Sewer Fund has allowed the City to enhance playfields, parks, and provide more services.
– Budget Hearing June 2 –
Changes to a recommended Budget are rarely made at the Council’s public hearings, as most of the actual work on the Budget has already been done during the Budget Workshop. These workshops are held away from broadcast systems in the Police Emergency Operations Center and are not available for public viewing.
The public will have an opportunity to voice opinions on the sewer issue and the entire Budget at the Council’s June 2 Budget Hearing. As required by the City Charter, this is the first of two public hearings.
Staff report on Sewer Fund.